Key Highlights
- EUR/USD extended its decline below 1.1800 and tested the 1.1700 region.
- A key bearish trend line is forming with resistance near 1.1825 on the 4-hours chart.
- The US nonfarm payrolls increased 916K in March 2021, up from 468K (revised from 379K).
- The US ISM Service Index could rise from 55.3 to 58.5 in March 2021.
EUR/USD Technical Analysis
This past week, the Euro extended its decline below the 1.1850 support against the US Dollar. EUR/USD even broke the 1.1800 level to move further into a bearish zone.
Looking at the 4-hours chart, the pair even broke the 1.1750 support zone. It traded as low as 1.1704, and settled well below the 100 simple moving average (red, 4-hours), and the 200 simple moving average (green, 4-hours).
Recently, there was a minor upside correction above the 1.1750 level. The pair surpassed the 23.6% Fib retracement level of the downward move from the 1.1946 swing high to 1.1704 low.
However, the pair is still trading well below the 1.1800 and 1.1850 resistance levels. There is also a key bearish trend line forming with resistance near 1.1825 on the same chart. The trend line is close to the 50% Fib retracement level of the downward move from the 1.1946 swing high to 1.1704 low.
To move into a positive, EUR/USD must break the trend line and then settle above 1.1850. If not, there is a risk of more losses below 1.1700 and 1.1680.
Fundamentally, the US nonfarm payrolls report for March 2021 was released this past Friday by the US Bureau of Labor Statistics. The market was looking for an increase of 916K.
The actual result was better than the forecast, as the US nonfarm payrolls increased 916K. The last reading was also revised up from 379K to 468K. The unemployment rate also declined from 6.2% to 6%.
The report added:
The number of unemployed persons, at 9.7 million, continued to trend down in March but is 4.0 million higher than in February 2020.
Overall, EUR/USD is likely to struggle near 1.1825 and 1.1850. Similarly, GBP/USD is recovering, but it might face hurdles near 1.3880.
Economic Releases
- US ISM Service Index for March 2021 – Forecast 58.5, versus 55.3 previous.
- US Factory Orders for Feb 2021 (MoM) – Forecast -0.5%, versus +2.6% previous.
